Employers Looking for Help On Health Care Costs

May 7, 2001 (PLANSPONSOR.com) - While many employers plan to stay actively involved in providing health care benefits, most hope to encourage employees to play a more active role in containing costs, and nearly half would stop providing retiree health coverage under the right circumstances.

Nearly half of the companies responding to a new Towers Perrin survey said they would be willing to exit retiree health if there were prescription drug coverage under Medicare. However, the vast majority say they are prepared to hold the course in providing retiree health benefits.

Only a small percentage of the companies surveyed are considering a defined contribution approach that would shift management of health plans from employer to employee.

Response Ability

Despite projections that those costs are expected to rise by 13% this year, according to Towers Perrin’s annual Health Care Cost Survey, just one in eight employer respondents expect to take a more passive role in providing health care benefits.  Still, 83% have, or are considering, measures to increase individual responsibility, choice and decision making in health matters by employees.

Among those firms with high levels of employee Internet access at work (50% or more), the survey found a significant number more likely to consider consumerism important than those employers who report a lower percentage of their employees with Internet access at work.  Those advocating an “e-health” approach nonetheless had varying perspectives. 

Among survey respondents:

  • 92% believe that an e-health portal should provide health care program-related information
  • 91% say it should allow employees to perform administrative tasks
  • 84% see it as a means to promote health and wellness
  • 83% would use it to provide electronic connections to health plan vendors.

A considerably smaller number would include factors such as the ability to make on-line appointments with providers according to the survey’s authors.

While 80% believe health benefit self-service can improve employee satisfaction, the survey did uncover concerns about “e-health”, notably:

  • employee confusion if the e-health site is not designed strategically.
  • not enough employees have computer access.
  • employees are not ready to use technology.

Exit strategy

Asked under what conditions they would cease providing health care, more than half said they would consider that strategy if:

  • costs continue to rise
  • or if changes in tax law made it more favorable for individuals to purchase their own health care coverage.

Regardless, employer respondents estimated that 70% of their employees would not take kindly to a decision to exit.

The Towers Perrin survey, Facing Health Care Challenges in an Era of Change, was conducted in the last quarter of 2000. A total of 200 organizations participated in the survey, representing large companies with at least 5000 employees.